2011 South East Asian Regional Workshop
on Science, Technology and Innovation Indicators
(5 – 8 December 2011)
Innovation Survey of Hong Kong, China
Joseph Y.C. WONG
Census and Statistics Department, Hong Kong, China
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Topics covered in this brief

Background
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Methodology of the innovation survey of Hong Kong

Analysis of the latest profile of innovation activities in the
business sector of Hong Kong
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Background

Innovation represents a new source of industry competitiveness and
economic growth and is crucial to the development of Hong Kong
towards a knowledge economy

Under the “market leads, government facilitates” economic policy,
Government provides support to R&D and technology development in
Hong Kong through:
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providing funding support to R&D and technology upgrading projects in the
industry through the Innovation and Technology Fund (ITF)
providing monetary incentive through R&D cash rebate (10% of applied R&D
investment by business firms in partnership with local research institutes)
putting in place science and technology infrastructure (e.g. Science Park)
setting up public research institutes and R&D centres to facilitate technology
transfer to local industries
strengthening collaboration between parties in the Mainland China and Hong
Kong in the area of innovation and technology
fostering an innovation and technology culture through workshops, project
competitions etc.
3
Development of innovation statistics of Hong Kong

The Innovation and Technology Commission (ITC) was set up in
2000 by the Government of Hong Kong, China, with the mission to
spearhead Hong Kong’s drive to become an innovative and
knowledge economy

The Census and Statistics Department (C&SD) is responsible for
data collection, compilation and dissemination of science,
technology and innovation (STI) statistics

STI statistics are useful to the community and the Government in
tracking the development of innovation and technology in Hong
Kong and for formulating evidence-based science and technology
policy and promotion strategies
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Innovation statistics for the business sector are compiled from data
collected through the Survey of Innovation Activities introduced
since 2001 (R&D data are also collected in the same survey)
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C&D adopts international statistical guidelines for compilation
of internationally comparable STI Indicators of Hong Kong
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Concepts and definitions adopted in the innovation survey are based
on the Oslo Manual (OECD and Eurostat)
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Effort has been made to align the framework of the innovation
survey of Hong Kong with that of the Community Innovation
Survey for the European economies to facilitate compilation of
internationally comparable innovation statistics
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Metadata of the innovation survey

Frequency: annual survey conducted under the Census and
Statistics Ordinance as a mandatory survey, specifically designed
for collecting data on innovation activities in the business sector
of Hong Kong
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Number of survey rounds: since its introduction in 2001, ten
rounds of the innovation survey have so far been conducted;
fieldwork for the 2010 survey round has been completed and
survey findings will be released by end 2011
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Reference period: calendar year
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Coverage: an economy-wide survey covering all major industries
in Hong Kong, except agriculture, forestry, fishing, mining and
quarrying industries (insignificant, accounting for 0.06% of GDP)
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Coverage and sampling method
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Sampling frame: Central Register of Establishments (CRE), an
computerised database containing records of all companies and
organisations operating in Hong Kong; private non-profit organisations
are not separately identified in the CRE
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Industry classification: Hong Kong Standard Industrial Classification
(HSIC) Version 2.0, modeled on the UN’s International Standard
Industrial Classification of All Economic Activities Revision 4, with
local adaptations
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Population size: around 300 000 business firms in Hong Kong
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Sample size: a sample survey on around 5 500 business firms in each
survey round
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Sampling method: stratified sampling; business firms are stratified by
industry group, and within each industry group, further by firm size (in
terms of employment) – construction firms with less than 10
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employees are not covered
Challenge: special features of the sampling design

Innovative firms are small in number, in particular technological innovation
performers represent around 3% of all business firms in Hong Kong; innovation
activities are not regular and not evenly distributed among industries
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To enhance the effectiveness of data collection, target business firms (with a
greater potential of being R&D performer) are covered in full (certainty cases):
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Firms which have been reporting R&D data to previous rounds of innovation survey
Firms identified to have undertaken R&D through a screening question in the largerscale annual survey of economic activities (with over 20 000 firms enumerated in
each survey round)
Firms engaged in R&D projects in collaboration with public research institutes
Firms operating in technology clusters (e.g. Science Park)
Firms which are applicants for government ITF and R&D cash rebate
Firms which are patent applicants
Other target firms identified from media reports and intelligence from other
government agencies
For other firms, a sample is drawn from each stratum, with a greater sampling
fraction for larger firms and for those industry groups which tend to have a
greater propensity to perform R&D and innovation activities
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Data collection method
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Data collection method: mainly personal interviews (including
face-to-face interviews and telephone interviews)
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A typical survey cycle of the Survey (2010 reference year as an
illustration) is as follows:
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Review of changes in data requirements and finalisation of
questionnaire: November to December 2010
Preparation and printing of survey documents: January 2011
Training of interviewers: February 2011
Fieldwork period: February to September 2011
Response rate: over 95%
Data quality assurance measures: computer validation and field
verification of dubious cases throughout the data collection process
Data tabulation and analysis: October to November 2011
Dissemination of survey results: end December 2011
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Classification of innovation activities
Innovation
Technological
innovation
Product
innovation
Process
innovation
Nontechnological
innovation
Organisational
innovation
Marketing
innovation
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Technological innovation
• Product innovation
– Introduction of a technological new or significantly improved
products (goods and services) e.g. Octopus card (smart card
system), Mycar (electric car), mobile banking
• Process innovation
– Implementation of a technologically new or significantly
improved process (production and delivery) e.g. GPS tracking
system for logistic company
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Non-technological innovation
• Organisational innovation
– Implementation of a new organisational method in the firm’s
business practices, workplace organisation or external relations
(e.g. business re-engineering, introduction of a new supply chain
management system; quality-management system etc.)
• Marketing innovation
– Implementation of a new marketing method involving
significant changes in product design or packaging, product
placement, product promotion or pricing (e.g. branding,
introduction of new flavours for a food product in order to target
the product to a new customer segment etc.)
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Challenge: what constitutes innovation activities (e.g. product
innovation versus customisation of product) and the distinction
between innovation activities of different nature (e.g. product
innovation versus marketing innovation) may not be clear to some
respondents; overcome by including practical examples in explanatory
notes accompanying the questionnaire (some illustrations given below)
• Development of a new multimedia software is product innovation whereas
use of the new software to business applications is not a technological
innovation activity
• Introduction of new internet or mobile banking services is a technological
innovation whereas making use of mobile banking for sales of bank
products is not a technological innovation activity
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Major data items collected in the innovation survey
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R&D data (covered in the presentation on Measuring R&D in Hong
Kong, China)
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Technological product and process innovation implemented by
firms
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Expenditure on product and process innovation, comprising:
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Expenditure on in-house R&D
Expenditure on R&D outsourced to other parties
Industrial design and other preparation (e.g. production start-up, tooling up
and industrial engineering) for production or delivery of new products
Acquisition of plant and machinery related to technological innovation
Market introduction of new products
Acquisition of external technology (e.g. patent, know-how) related to
technological innovation
Training directly related to technological innovation (e.g. training of staff on
use of new production technology or new processes)
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Innovation data collected in the survey (cont’d)
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Innovation expenditure by source of funds (industry, government,
abroad) for implementing technological innovation
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Number of direct employees deployed to technological innovation
activities (full-time equivalent)
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On-going technological innovation and abandoned technological
innovation
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Effects of technological innovation (e.g. broadening range of
products, increased market share, product quality improvement,
enhanced productivity, cost reduction, introducing environmentally
friendly products and processes etc.) on business firms
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Contribution of product innovation to business receipts
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Innovation data collected in the survey (cont’d)
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Collaboration arrangements on technological innovation (by type of
local and non-local partners)
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Sources of knowledge or information (e.g. internal sources, market
sources, institutional sources, technical standards, environmental or
product safety standards etc.) used in technological innovation
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Barriers to technological innovation
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Non-technological organisational and marketing innovation
implemented by firms
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Dissemination of
R&D statistics and STI indicators of Hong Kong
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R&D and innovation statistics of Hong Kong are published in the annual
publication Hong Kong Innovation Activities Statistics
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Hong Kong Innovation Activities Statistics 2009 was published in end December
2010
The 2010 edition will be published in end December 2011
More comprehensive analyses of science and technology statistics and other
knowledge-economy statistical indicators are published in the biennial
publication Hong Kong as a Knowledge-based Economy
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The 2011 edition was published in September 2011
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Feature articles on R&D, innovation activities and KBE published in
Monthly Digest of Statistics
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All C&SD publications and their back issues can be free downloaded from
C&SD website: http://www.censtatd.gov.hk/home/index.jsp
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The percentage of innovative firms increased from 16% in 2001 to
39% in 2009 (around 110 000 firms)
Percentage of innovative firms
60
50
39
40
30
20
16
10
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
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Business expenditure on technological product and process innovation
peaked in 2005 and has been consolidating in recent years
Business innovation expenditure increased from US$ 0.9 Bn in 2001 to
US$1.8 Bn in 2009, with an average annual growth rate of around 10%
Business expenditure on technological product
and process innovation (US$ Mn)
2,600
2,400
2,200
2,000
1,800
1,600
1,400
1,200
1,000
US$ 0.9 Bn
800
600
400
200
0
2001
2002
2003
2004
2005
US$ 1.8 Bn
2006
2007
2008
2009
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The import/export trade (involving trading firms with manufacturing
related activities in Mainland China), distributive trade,
accommodation and food services industry group has a higher
technological product innovation intensity (2009 results)
% contribution of new/significantly improved products to innovative firms’ business receipts
35
30
28
25
20
14
15
14
12
10
10
5
0
Import/export trade,
distributive trade,
accommodation and
food services
Information and
communication
Manufacturing
Overall
Financing, insurance,
real estate,
professional and
business services 20
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In the business sector, large firms taken together account for 34% of the
total technological innovation expenditure, compared with 38% for
medium-sized firms and 28% for small-sized firms (2009 results)
Small-sized
firms (28%)
Large firms
(34%)
Medium-sized
firms (38%)
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Impact of technological innovation on businesses (2009 results)
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Improved quality of products (26% of firms which have undertaken
technological innovation)
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Improved production flexibility (20%)
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Increased range of products (20%)
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Reduced labour cost per produced units (17%)
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Increased production capacity (17%)
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Barriers to technological innovation (2009 results)
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Innovation costs too high (66% of firms which have undertaken
technological innovation)
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Excessive perceived economic risks (56%)
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Inadequate emphasis on technological innovation in government’s
procurement (46%)
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Organisational rigidities – attitude of senior management towards
change (43%)
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Thank you
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